Possessory Title Indemnity Insurance

What is Possessory title?

Possessory title refers to when registration of a title was applied for, the applicant didn’t have the right documents when registering the title to satisfy the threshold for the absolute title (the best form available).

There are a number of reasons why land may be registered with possessory title. It usually indicates that when registering a claim for ownership of land the applicant did not have the necessary documentation at the time of registration to satisfy the Land Registry’s requirements for an absolute title which is the best form of title available.

There are often valid reasons for this – deeds may have been lost, stolen or destroyed. In the Second World War, for example, many documents were destroyed during bombing raids. Floods, fire, theft – you can imagine how belongings and important documents can be lost or destroyed. So, where deeds are lost or destroyed, the applicant must apply based on copies of documents (if available) and statutory declarations, setting out the basis of their application and the reason for any missing documents.

In what circumstances is cover required?

Where all or part of the Property comprises a Possessory Title registered at Land Registry or is not registered and adverse possession is claimed.

Product features

Risks covered: losses sustained should any party establish or seek to establish an adverse interest and includes damages/costs awarded to a claimant, reduction in market value, cost of necessary works and other costs and expenses.

How long is possessory title?

It is often the case that there is no registration of the parcel of land and that ownership is unknown.  In those circumstances, an initial application for registration of Possessory Title will usually involve Land Registry contacting all those who may own the land.  If no claims are received Possessory Title may be granted. After 12 years Land Registry will then review an application to convert the title to Title Absolute.

What do I need to find out?

First – why is the title ‘possessory’? Have the deeds been lost or is the title based on squatters’ rights? Where the deeds are lost, and the seller has lived in the property for many years, will they provide a sworn statement providing details of their knowledge and the history of the property?

If the title is based on squatters’ rights, there is a risk that the true owner could come forward with a better claim for possession, with deeds to prove they are the true owner.  This could leave you, if you have bought the property with no title to the property and no compensations for your loss, even if you had, for instance, built a house on the land.

So it is vital that you take out an indemnity insurance policy to protect you and your mortgagee against such losses.

Can possessory title be challenged?

While the occupation of land or property continues based on possessory title only, anyone who can demonstrate a superior right of ownership of the land can overturn the possessory title. Once twelve years exclusive occupation has been demonstrated and Land Registry convert the title to Title Absolute (i.e. freehold ownership) then that ownership can not normally be challenged. The exception would be where, for example, Land Registry’s granting of Possessory Title was based on deliberately incorrect or fraudulent statement by the party seeking to obtain Possessory Title.

How do you prove adverse possession?

It is normally the case that the party demonstrating possessory title must show and extended period during which they have enjoyed exclusive possession of the land, that others are excluded and that the adverse occupation is apparent. Typically this would be that the land is enclosed with the parties other land, has been maintained as part of the broader land and is fenced or otherwise enclosed although Land Registry looks at each case on its merits.